Haberern v. Kaupp Vascular Surgeons, Ltd.

855 F. Supp. 95, 1994 U.S. Dist. LEXIS 7138, 1994 WL 278537
CourtDistrict Court, E.D. Pennsylvania
DecidedMay 23, 1994
DocketCiv. A. 88-1853
StatusPublished
Cited by3 cases

This text of 855 F. Supp. 95 (Haberern v. Kaupp Vascular Surgeons, Ltd.) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Haberern v. Kaupp Vascular Surgeons, Ltd., 855 F. Supp. 95, 1994 U.S. Dist. LEXIS 7138, 1994 WL 278537 (E.D. Pa. 1994).

Opinion

MEMORANDUM AND ORDER

HUYETT, District Judge.

I. INTRODUCTION

In this action, Ruth Haberern (“Plaintiff’) successfully challenged Defendants’ violations of the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. (“ERISA”). 1 Plaintiff now requests attorneys’ fees and costs in the amount of $276,-611.30 for services rendered by Drinker, Biddle & Reath (“Drinker”), $38,156.66 for services rendered by Maloney, Danyi, Davis & Danyi (“Maloney”), and $15,242.00 for services rendered by the accounting firm Buckno, Lisicky & Company (“Buckno”). In the alternative, Plaintiff seeks enhanced fees of $333,461.30 for Drinker, and $18,242.00 for Buckno reflecting fees calculated at 1993 hourly rates. Plaintiff does not request an enhanced fee for Maloney.

II. THE “URSIC” FACTORS

Section 502(g)(1) of ERISA, 29 U.S.C.A. § 1132(g)(1), provides: “[i]n any action under this subehapter (other than an action described in paragraph (2)) by a participant, beneficiary, or fiduciary, the court, in its discretion, may allow reasonable attorney’s fees and costs of action to either party.”

In the Third Circuit, courts consider five factors in determining whether to award attorneys’ fees under ERISA:

a) the offending parties’ culpability or bad faith;
b) the offending parties’ ability to pay;
c) the deterrent effect of an award of attorneys’ fees on the offending party and others similarly situated;
d) the benefit conferred on members of the pension plan as a whole; and
e) the relative merits of the parties’ position.

Ursic v. Bethlehem Mines, 719 F.2d 670, 673 (3rd Cir.1983). The Court must consider “each factor in balance and relationship to the others.” Ellison v. Shenango Inc. Pension Bd., 956 F.2d 1268, 1278 (3d Cir.1992). Applying the Ursic factors, the Court finds that the Plaintiff is entitled to reasonable attorneys’ fees and costs.

First, Defendants’ culpability and bad faith supports an award of attorneys’ fees. The Defined Benefit Pension Plan (“Plan”) required Defendant Lehigh Valley Vascular Surgeons, Ltd. (“Lehigh Valley”) to contrib *98 ute to Plaintiffs pension. Instead, Lehigh Valley compelled Plaintiff to fund her own pension by reducing her salary, and used the money saved to fulfill Lehigh Valley’s contribution obligations. Haberern, 822 F.Supp. at 253. Defendants collectively misled Plaintiff as to Lehigh Valley’s obligation to contribute and as to the nature of the contributions and pension benefits. Id. at 254, 260-61. Lehigh Valley passed a discriminatory amendment to the Plan that tripled the face value of all other participants’ life insurance policies, while totally eliminating the Plaintiff. Id. at 254. After Plaintiff retired, Defendants offered a series of excuses delaying any distribution of Plaintiffs pension benefits for over two years. Id. at 255.

Second, as Defendants have failed to produce any evidence on point, the Court must conclude that they are able to satisfy any award. Ellison, 956 F.2d at 1277; Monkelis v. Mobay Chemical, 827 F.2d 935, 937 (3d Cir.1987). 2

Third, in light of Defendants’ culpability and shocking disregard for the rights of Plan beneficiaries, an award of attorneys’ fees will be a useful deterrent against future violations of ERISA. The retirement of Dr. Kaupp, who Defendants argue was primarily responsible, does not alter this conclusion. Defendants’ collective actions misled Plaintiff and sought to deprive Plaintiff of her rights.

Fourth, although no other Plan participant will receive pecuniary benefit from this action, they will benefit from its deterrent effect. Further, “the failure of plaintiff’s action to confer a common benefit on a group of pension plan participants does not bar their recovery of attorney’s fees.” Ford v. New York Central Teamsters Pension Fund, 642 F.2d 664, 665 (2d Cir.1981); see also Devine v. Xerox Corp., 668 F.Supp. 351, 358 (D.Del.1986).

Fifth, the relative merits of the parties’ positions weigh in favor of an award of attorneys’ fees to Plaintiff. Plaintiff prevailed on the merits of most of her claims. Haberern, 822 F.Supp. at 265-66. The Court is not persuaded by Defendants’ repeated attempts to characterize its conduct as the mere reduction of an at will employee’s salary. This case involved an employer’s diversion of an employee’s salary to satisfy the employer’s pension contribution obligations. Id. at 253. Equally without merit is Defendants’ contention that Plaintiff lacked standing to assert a claim under Section 105 of ERISA because she had retired and, thus, was no longer a Plan “participant.” Any former employee with a “colorable claim” to vested benefits is a Plan participant. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 117, 109 S.Ct. 948, 958, 103 L.Ed.2d 80 (1989).

Defendants’ refusal to pay Plaintiff’s pension benefits was founded upon “a series of excuses.” Id. at 255. In particular, the attempted imposition upon Plaintiff of a release was “arbitrary and capricious.” Id. at 263. “Nothing in the [Plan] or ERISA states that Plaintiff is required to execute a release to receive a distribution of her pension benefits.” Id. Defendants’ argument that they amended the Plan without discriminatory intent was “unworthy of belief.” Id. at 262.

Considering each Ursic factor “in balance and relationship to the others,” the Court finds that Plaintiff is entitled to attorneys’ fees. Defendants are not.

III. CALCULATION OF REASONABLE ATTORNEYS’ FEES

Plaintiff bears the burden of proving reasonableness of fees claimed. Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1982); Keenan v. City of Philadelphia, 983 F.2d 459, 473 (3d Cir.1992). The starting point for determining a reasonable fee is calculation of the “lodestar.” The lodestar is the product of an attorney’s reasonable hourly rate and the number of hours reasonably expended.

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855 F. Supp. 95, 1994 U.S. Dist. LEXIS 7138, 1994 WL 278537, Counsel Stack Legal Research, https://law.counselstack.com/opinion/haberern-v-kaupp-vascular-surgeons-ltd-paed-1994.